By Leav Graves
Update: We've written a step-by-step guide on how to trade unusual options activity. Check it out after you've read this post.
On Jan 7th, I noted that a trader had traded an unusually large amount of call options on $DD. That unusual options trade was interesting because of the (relatively) low break-even point (3% from close) and the large number of options traded. The volume for the day was 865 TIMES bigger than the entire open interest on the stocks. Also, and maybe more importantly - the expiration - 23rd of Jan was close - another testament to that trader's conviction.
$DD unusually large volume on jan-23 72C. 865x the OI. Trader made a bullish bet. BE point 73$ - 3% above close. — OptionSamurai (@OptionSamurai) January 7, 2015
On Jan 9th - just two days later, the market turned very bullish, and stocks soared higher. In two days, the trader made over 400K$. Not bad:
You can find more trades like this in our options scanner.